Tamil Nadu rolls out scheme to woo electronics component makers

The scheme will match incentives offered by the Modi govt

Chennai: With several electronics manufacturers looking at India to shift their production from countries against whom the United States has imposed higher tariffs, the Tamil Nadu government on Wednesday launched a scheme that offers “matching incentives” of the central government’s Electronics Components Manufacturing Scheme to attract companies to the state.

Through the Tamil Nadu Electronics Components Manufacturing Scheme, the state government hopes to attract investments worth Rs 30,000 crore and generate employment opportunities for 60,000 people. Industries Minister T R B Rajaa said Tamil Nadu is the first state in the country to launch a dedicated state scheme in the sector.

The scheme aims at attracting leading global and Indian firms in sub-segments such as HDI/MSAP boards, display assemblies, camera modules, lithium-ion cells, SMD passive components and capital goods used in electronics manufacturing.

The Modi government’s scheme, which is aimed at reducing imports from countries like China, offers turnover-linked incentive for sub-assemblies and bare components, hybrid incentives for selected bare components, capex incentive, and supply chain ecosystem and capital equipment for electronics manufacturing.

Rajaa said the “matching grants” scheme is carefully structured to mirror the Union government’s program, with targeted support for the same segments — including sub-assemblies, bare components, capital equipment and supply chain infrastructure.

“Through this, we want to ensure that Tamil Nadu remains competitive in attracting these high-value, capital-intensive projects. With this move, we aim to attract Rs 30,000 crore in investments, helping create 60,000 high-quality jobs,” the minister said.

The scheme has been announced at a time companies like Apple Inc are considering shifting production of iPhones from China to India through its contract manufacturers, Taiwan’s Foxconn and home-grown Tata Electronics Private Limited (TEPL) in the wake of higher tariffs imposed on them by the US.

While TEPL already produces enclosures for smartphones of various brands at its Hosur facility, Foxconn’s arm Yuzhan Technology (India) Pvt. Ltd, is building a massive unit at the ESR Industrial Park in Oragadam near Sriperumbudur to build smartphone components like display modules by investing Rs 13,180 crore.

US-based Gorilla glass maker Corning International Corporation has set up its first India unit near Chennai to manufacture front-cover glasses for electronic devices, bringing the precision glass-processing technology to the country for the first time.

“Our focus has always been on moving up the value chain and that’s why we have been focusing on electronics component manufacturing and clinched a deal with Yuzhan in 2024. With the US tariff issue coming to our advantage, we want to ensure that Tamil Nadu remains the top choice in India for component makers,” a source in the government told DH.

The launch of the scheme comes close on the heels of Tamil Nadu hitting a historic high of $14.65 billion in electronics exports in 2024-25 fiscal, accounting for 41.23 per cent of India’s total electronics exports.

Key components being made in India will come as a big boost to the electronics ecosystem in Tamil Nadu which is also home to other Apple suppliers like Salcomp, and Jabil, which are moving towards building a manufacturing unit in Tiruchirapalli. Another supplier Luxshare of China is waiting for permission from the Union government to launch operations from the old Motorola factory it acquired in 2021.